[Soul of the South]

Another reason to raise tariffs and bring factories back to the US. Is it better to pay $1.00 more for a toaster made in the US, thereby employing low skill labor, or to pay less for the toaster but $1.50 more in taxes so the government can provide benefits for the low skill laborer who cannot find a job in the US?

Not only does the low skill assembly job benefit people who would otherwise be sitting at home collecting the dole, the payment to the US factory builds the US economy while paying a Chinese factory for the same product benefits the Chinese worker, the Chinese factory owner, and the Chinese economy.

What our government, and most economists don’t seem to understand is the outsourcing of production of everyday consumer products to other countries has destroyed the government’s ability to jump start the economy out of recession. Forty years ago, the government putting more money in the hands of consumers through tax reductions or direct payments would result in increased demand for consumer products. That demand would translate into more orders for the US factories producing the product. Higher orders, results in more production which in turn increases demand for labor.

Fast forward to 2008. The government increased spending by $1 trillion annually to put more money into the economy. To the degree consumers bought toasters, bicycles, iPads, computers, clothing, and furniture with that money, they benefited Chinese factories, not American factories. The American factories producing those goods no longer exist. In essence the government borrowed money it didn’t have to increase demand for consumer goods produced by Chinese factories.

Bring the consumer goods assembly factories and the low skill jobs back to the USA. It is a matter of national security.

[Pining_4_TX]

Tariffs don’t work. They only make everyone poorer. They are a form of subsidy and subidies hurt even those who receive them.

http://www.fee.org/the_freeman/detail/subsidies-for-everyone-a-new-way-of-life/#axzz2FNSWqsm8

http://cafehayek.com/2012/10/trade-is-mutual.html

[Colorado Doug]

Very good points! This is the elephant in the room that somehow the writer ignores. Our downfall is that our outsourcing and enriching other economies while destroying our own. We created the boom in Asia.